Salesman Pay Survey


Since the last survey results in October, 2001, not many participated, so in

order to supplement the response we did receive, Leasing News asked several leaders in the industry how they would respond to a question received from a reader

about going to work for a leasing company.


Responses were listed in chronological order, first received:


PB is Patrick Byrne, president of Balboa Capital

BL is Bruce Larsen, National Sales Manager of Leasing Partners Capital

JR is Jim Raeder, president of Capital Werks

DR is David Rabinowitz, Chief Operating Office, Bankers Capital

FS is Fred St. Laurent, Managing Director, The BlassGroup (recruiting firm)



“My name is I am currently an outside sales rep with a fortune 100 company selling electronic payment solutions (doing well but want to move up into the six figure range). I have been offered a job with 888888 in SLC as an inside sales rep. I found your site by searching Yahoo for the company and the content is very informative.


“This is quite a jump. From a Fortune 100 company selling electronic payment systems to a small company selling small ticket equipment leases? Are you sure you are ready for this transition(less

resources, less name recognition, etc.)?


I am new to the leasing business (although I do sell small equipment leases in my current position), and need to make a critical career decision here. I am hoping that you could help shed some light on the following:




1. Is ******* an ethical, stable company in good standing as far as you know? I know there has been some turmoil in their past.


I can t comment on this as I do not know much about *****



I think Pats response is as good as you can do without getting into any

specifics about *****



Are Pro-rata Billing, Interim Rent, Evergreen Clauses, Blind Discounts, and High Interest Rates, unethical? Several debt sources in the past used to believe so. Most of those same lenders that have stayed in business for the past three years and have adopted such revenue enhancers would not agree. I always subscribe,” What’s good for GE is good for me!”



I don’t know enough about the company or the principals to comment.




Past is past... I will not make a comment but I would suggest speaking

with some references ... clients, sales people... I would do this on my

own... a list from the company could be biased. It is easy enough to

research, identify and ask innocuous questions that will get the





2. Are the market conditions/demand for middle market brokered equipment leases (********t) stabilizing, or are they still soft from the economic downturn?


I would characterize the market as still soft but stabilized with many leading indicators pointing to an uptrend.




Pat did a good job of responding.



Although interest rates remain low, the supply of money chasing quality credits is limited. Ever since CapitalWerks formed its Venture Leasing division, we have succeeded with highly structured transactions passed on by most traditional lenders. We have not seen a shortage in these types of deals. Good news is we have placed over 35 Million in this division alone in 2003.



We run a hybrid shop; we do some repeat business with an established existing customer base but our main focus is to act as a high-risk funding source to a handful of intermediaries.  Business couldn’t be better !

Well, it could but first we need a couple more quality credit analysts.  We hear competition is out there for deals and margins on” A” perceived credits are tight. “B” paper is a big concern for intermediaries.  Buy windows keep closing (CIT just recently) and a few times a month we are asked if we would fund “B” paper at a 9 ½% to 11% buy rate.  From what we see the banks have migrated to quality and raised the credit bar. 

That means a company with some hair on its credit is a bit more challenging to find a funder for.  We have heard from vendors interest is increasing and soon that should translate to activity; but time will tell.



A soft market is just another excuse to not work harder... The "New

Guys" with a strong work ethic who are to "dumb" to know any better

usually seem to have "beginner's luck" ... isn't that interesting.

Yes it is a soft market... but it is a great time to learn the

business... interest rates will rise again and learning this business in

the "hard times" will groom you to excel in the "good times" to come.




3. ********* is offering me a $36k base, 50% company paid medical/dental etc., and 10% on gross margin (including GM on FMV buyout residuals), with a $10k bonus @ $500k in GM and a $15k bonus @ $1mm. Is this a competitive compensation package? I read the sales pay survey and had a hard time determining if it is. I have been told that their average rep makes $100k first year, $150k second year...


I would say that this is competitive package for a vendor based sales rep that has sales experience but is new to equipment leasing. I find it hard to believe that a sales rep that is new to equipment leasing could make $100k in the first year with this package, but I have been wrong before. However, with the right resources, and time; I believe that a six figure income with this package is reasonable.



What kind of marketing support, etc., will *****e give him to basically start from scratch? The base salary s nice, but how long will they guaranty that if he doesn’t

produce? What kind of quotas must he generate, at a minimum, to protect

his base? Obviously, straight commission will always offer a bigger




I would say that this is competitive package for a vendor based sales rep that has sales experience but is new to equipment leasing. I find it hard to believe that a sales rep that is new to equipment leasing could make $100k in the first year with this package, but I have been wrong before. However, with the right resources, and time; I believe that a six figure income with this package is reasonable.



Unless my 12C has run out of juice, at $500,000 gross fee the rep earns $36 base, $50 commission and a $10 bonus; that’s $96,000 for generating $500,000 in fee.  In the mid 1980’s when I started in sales our comp program was a draw at 30%.  We would have earned $150,000 and I recall when 30% was at the low end.  A draw or salary isn’t much different; if you don’t make your numbers the employer can’t recover the money

and you won’t be there long.



Is the salary a true salary or a draw against commission??? That would

be the issue. There are much better packages, 40-even 70% from 3rd party

lenders, who would pay you a draw, but they want experience and vendor

relationships. Can you do a 500k in gross margin in today's market

though? I doubt that someone new will hold that kind of margin the first

year in this economy. Reality is that you will make somewhere around

50-60k your first year if you work really hard, with the market the way

it is. AND HEY... that's not bad if they are training you too!!!

CAUTION: check out what the medical costs will be on the benefit package

before you take the job... it can be a lot more than you think if you

have any medical history... this is a big one.



4. Any other issues or 'red flags' that you know of regarding the company or market space, or advice you would give me in making my career decision?


I would want to know what current vendor programs ***** has, what type of volume they are doing with these programs, and what the unique selling propositions they provide for these vendors. I would also be asking questions about **** s ability to process the leases. Does ***** have its own funds? If not, who do they sell their paper to? Additionally, how fast are credits turned around and how fast are fundings turned around? How do these figures compare with ******s competitors in the targeted space and how do they compare to some of the best in the vendor leasing arena (GE, DLL, Marlin, GreatAmerican, AMEX, etc). Finally, will you be expected to process deals or simply bring in the vendors? If you are looking to make six figures

then it is going to be much easier if you have key strategic resources at your disposable.



Are there any boundaries surrounding the numbers hes being

offered right now? What are the average transaction sizes and what are the

average grosses on their leases? Who funds their deals? Are they a direct

lender, a super broker, broker, etc.? And, how do they get paid? Are they

discounting or brokering? How do they calculate their commissions?

Depending on what answers you get from these questions could lead to asking

a bunch more.




In the upper middle ticket business he needs to be creative and open minded. ******* will provide the training to be successful as will anyone with middle market experience that is still out there. This is not a business for someone who lacks problem solving skills. The most difficult part will be to manage the client’ss expectations with the products available in the marketplace. Sometimes this takes mo Guns" at every leasing company know what I'm talking about.



Where do you want to go?  If you know the leasing business find out who the employer has for funding sources and how long the relationships have been in place.  If the broker doesn’t last long with stable sources there must be a reason why.  A far older rep once warned me if you walk with the lame you’ll develop a limp.  Work for someone with a questionable reputation and not only can it rub off on you but you could find

yourself wed to poor business practices that could make you less desirable to your next employer.



Can you think out of the box? Can you establish a Consultive

relationship with someone and come up with solutions to problems that

they didn't know they had? If you can relationally save someone money in

this economic environment, and help sales people to sell more equipment

you will be successful. You have to commit to learning everything there

is to know in your spare time, while being available for your customers

24-7... UNDER PROMISE and OVER PREFORM... this is the best way to manage

customer expectations and you will only be able to this if you

understand the process and the deal flow completely... other than that

it is a "piece of cake" good luck to you (I would suggest that you

commit to 10 hours a day minimum... the harder you work, the luckier you







In prefacing his remarks, Jim Raeder commented on the person who originally

asked the questions about whether this was the time to get into equipment

leasing sales:


“ This is quite a jump. From a Fortune 100 company selling electronic payment systems to a small company selling small ticket equipment leases? Are you sure you are ready for this transition(less resources, less name recognition, etc.)?


“Good company to join and learn the basics. They are primarily focused on larger transactions with unique structures. The sales cycle of these transactions are long and competitive. He should make sure he give ample time to hit a “Home Run” because there will be a few “Strike Outs” on the way. Once he’s learned the business I’d be glad to discuss with him additional avenues of increasing income through alternative finance products.


“To sum this up:. He’s making the right move at the right time if he can commit more then 8 hours a day.”




For every $1 of revenue that's generated in "fee" income,

we average, this year, $0.44 (43.6%) in sales commissions and

$0.25 (24.8%) in expenses to "facilitate" that business.

That leaves $0.32 (31.6%) of every dollar in net income.

We take no salaries, so that's what is split amongst the

partners (the "facilitators"; the "risk-takers") for

take-home pay.


Commission structure . . .

Our general compensation plan for salespersons is 50% of the

gross profit commissions on a deal that they bring to the

table and 35% on a "house" deal.


We pay for virtually everything; telephone, marketing,

trade-shows, travel, computer, etc., etc. While we have paid

for health insurance in the past, we do not currently

do so (times are tough!).


Only very extra-ordinary, deal-specific, expenses are deducted

from the gross commissions for purposes of calculating a

salespersons commission on a deal.


James Brustad







ELA 2003 Industry Compensation Survey


Regarding your Salesman Pay Survey, the ELA has just completed its 2003 Industry Compensation Survey, which includes several sales positions.


The survey is available at for a fee.


Ralph Petta

ELA Vice President-Industry Services

(703) 516-8364




“This survey provides an analysis of prevailing wage and compensation data. It reports on salaries, benefits and incentive plans offered by member companies and covers 33 leasing positions, identified by detailed position descriptions.


“Member companies who participated in the survey paid $2,600.00 to cover the cost of the survey. Survey is free to companies who participated and $3,500 for member non-participants & $4,500 to non-members.


“Member Price: $3500


“Non-Member Price: $4500”



(If a reader has purchased this report and would like to share a “review” or

“recommendation, Leasing News would be glad to print it. editor )



Virus Info Center
Leasing News, Inc.
346 Mathew Street,
Santa Clara,
California 95050
Voice: 408-727-7477 Fax: 800-727-3851